Report summary

Canadian midcap Whitecap Resources will acquire BC / Cardium assets from Imperial Oil for US$627 million. Acquired production of 6,500 boe/d (83% liquids) will increase Whitecap's existing production base by approximately 23%. We value the assets at US$606 million, yielding an implied long-term oil price of US$87/bbl. Though Whitecap will pay close to full value for the assets, successful application of secondary recovery techniques and/or operational efficiency gains could unlock value upside.

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